The Stock of a Technology Company Has an Expected Return

question 28

Multiple Choice

The stock of a technology company has an expected return of 15% and a standard deviation of 20% The stock of a pharmaceutical company has an expected return of 13% and a standard deviation of 18%.A portfolio consisting of 50% invested in each stock will have an expected return of 14 % and a standard deviation

• A)less than the average of 20% and 18%.
• B)the average of 20% and 18%.
• C)greater than the average of 20% and 18%.
• D)the answer cannot be determined with the information given.

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Definitions:

Multinationals

Companies that operate in multiple countries, adapting their strategies to different legal and cultural environments.

Net New Jobs

The total number of jobs created by a business or sector minus the number of jobs lost, indicating overall employment growth.

Small Business Administration

A U.S. government agency that provides support to entrepreneurs and small businesses through loans, grant programs, and counseling.

Office of Advocacy

A governmental entity that represents the views and concerns of small businesses before federal agencies and Congress.